According to there website.....it is supposed to become "The Black Orchid" with a grand opening on Nov. 15th.......
Ok, they recently connected the link to an actual webpage. It appears the 49% chunk of the PT club they got from VCGH was changed into "The Black Orchid" in the DFW area. Another new concept club I guess......grand opening is Nov. 15th according to the site.
I agree, don't really see Ricks going after the Detriot market. And to start expanding the Oynx brand now seems out of character for Ricks. It should be mentioned that Black Orchid was a black themed club, though they have no website that i could find. It must be really small......probably like the first Temptations, it will be buried in the 10K and they will never discuss it. And it will be expensed, making earnings look worse than they were.....
Interesting.....there is a list of links to other clubs locations of Ricks on the bottom of the Vivid Cabaret LA site. Each one has a logo for the represented club......and then there is one with just text that says Black Orchid Cabaret and the link takes you to Ricks main site. A search for a club by that name brings up a Detroit club. Probably nothing big, but I guess they bought another club and someone in IT jumped the gun?
You might want to look up the word "branding"......dont' worry, the idea that a brand has value, even if intangible, threw even Buffet for years.
If the Vivid brand brings in more revenue than whatever the license cost......who cares? In time, we will see how good of a concept it is......
They never released the licensing contract terms.....so you really have no basis for that last comment. If it ever comes to that for Ricky Bobby's, the studio could take several approaches to such a negotiation. They might see the potential of expanding the brand into something worth more than a #$%$ DVD long forgotten!
Oh wow.....they can add a stripe somewhere! But really, good luck arguing a trademark battle on the paint colors of a car.
And who cares? It is just a name.....there are numerous possible outcomes if it is really an issue. Signs don't cost that much to worry about.
Ricks already has 2 clubs in Minn. as employee based entertainers. They have a developed structure to manage clubs if they can't use the IC model. Ricks just has to adjust there recognition of service fees, make all money transferred to dancers a revenue item and then payback a wage/commission to mimic the IC model. Revenue on the income sheet will go way up and margins will fall, but in the end.....Ricks will make money (any extra cost to manage this system will most likely come out of dancers paychecks). And dancers who can't make enough in service fees to cover minimum wage will not be kept for long. The $5m number comes from what the plaintiffs initially sued. At worse, that means around $10m for that one case when legal fees are added. If Spearmint Rhino had 6 clubs (a large location in Vegas) and damages was at $13M.....hard to see how Ricks can eclipse a that settlement.
Doubling $5M doesn't make $100M...genius! The $5M figure probably assumes that the plaintiffs believed Ricks would be found to be "willful". What lawyer would represent a case where the client willfully decided to engage in a business as an IC, and then complain they should have been paid as employees after the fact......yet file a lawsuit and think the defendant made an unintentional mistake? And $90M in legal fees would be pretty unreasonable.....at the most, this case will be damages around the $10M mark after legal fees. Much less these case have ended cheaper for larger establishments.
Ironically, the judge stated that summary judgment must look at each point in the defendants favor before passing a ruling. Yet, the judge passed over many facts that would be in Ricks favor on the economics test of employment. For example, on behavior control.....factors like tranmittability of work (dancers can work for multiple clubs or on there own), method of entertaining or severability of service without liability would be in Ricks favor. Yet, the judge decided to mainly focus on rules geared towards venue preservation. On the integral to the success of the business.....the rule is supposed to focused on the integralness of any one dancer, not the entire group of dancers. No one dancer is integral to Ricks. Under such a definition.....lawyers, accountants, authors, personal trainers and many more professions commonly using ICs would be in violation of such a definition.
Either way, the stakes involved in this specific case are around the $5M mark. That isn't a sum that will remotely threaten the viability of Ricks as a going concern anytime soon! Once again, you are promoting a ficticious story line to back your opinions.
The added short position is most likely a hedge against convertibles that Ricks sold. If you have a convertible $2 in the money and a 10% interest rate......you aren't looking to take on equity price risk in order to collect your 10%. They are probably just hoping to get the next coupon. It also lets them with offloading the position when the day comes to convert. The convertible (why they issued it, I don't know and hindsight seems dumb) issued in August would be fully hedged by the 200K increase in short interest. This isn't a reflection on Ricks, just wise money management by a debt holder!
Well, actually.....I am pretty sure I saw that point raise in the last positive Seeking Alpha article. But it was refuted by the fact that large chunk of the current liabilities is a result of the pole tax being capitalized. Much less, that liability could be fulfilled by diverting cash for less than a year towards paying it, if needed. Every year that they go on without a solution.....the amount of cash Ricks generates per year grows. Plus $6M of debt would vanish if they had to pay the taxes from the Jaguars acquisition.
Ricks considers growing by the rate they grow revenues. While not that I care about how much revenues grow if they don't translate to the bottom line, that is clearly what Ricks means. Much less, some of the expenditures that cause growth to be smaller are acquisition related.....while most companies would capitalize them, Ricks expenses them do to there nature. Just like Amazon is normally unprofitable under GAAP......yet, the stock price keeps going up.
If they settle, this suit will settle for less than $10M.....maybe $5M is still on the table? That is less than two years of profit from the NYC club. I wouldn't expect much of a drop on the settlement, since closure would be a positive. On the flip side, settling would just bring out more lawsuits. If it was just one case, it would probably be in Ricks interest to settle. But longer term, Ricks is probably better off putting up a strong defense of the IC model if they wish to keep using it. Other clubs will be sued, there are too many lawyers looking for a quick buck not to look for more unprofitable or retired strippers wanting some extra cash. If they settle, they better convert to the employee model everywhere or we will be settling every year with another group. Case law goes against Ricks at the moment, but that could be largely a result of nobody willing to spend the money to fight it. Clearly in NYC, Ricks would have been better off settling from day one for $5M than 4 years of legal fees which is probably already greater than that amount.
Maybe one day, someone can explain to me why can't people just pursue a career or job they like, instead of supposedly feeling they are entitled to work for a specific company under the terms that work best for them? If you didn't like the IC model, don't be a stripper at Ricks!
This lawsuit goes one of two ways, either they settle soon......because with the summary judgment in place, the trial won't go very well for them. Or they aggressively fight the summary judgment.....but that is an uphill battle. Too win, they would basically have to get the FLSA thrown out (doubt this will happen) or completely change there arguments. I do believe that the strip club industry is far better off under the independent contractor model, but with the way FLSA is laid out.....it won't fly. From the way the summary judgment reads, and most labor lawyers stand, the independent contract model is improper for most. Under the interpretation given in the summary judgment.....Ricks has a dress code (aka control), a larger financial risk, doesn't require previous experience and Ricks needs strippers to be a strip club. The only thing does go in Ricks favor is that strippers duration is usually pretty short.
Successful strippers are being penalized by those who shouldn't be in the business, but because they were ICs.....Ricks has no incentive to terminate them for being unprofitable. Strippers who, if they had half a brain, should have moved on to greener pastures, stuck around making less than minimum wage (apparently one girl didn't break minimum wage for 39 weeks). Ricks will never convince anyone they don't have control.....so they will have to focus on financial risk and skill set. In the ruling, it was pointed out that 60% of strippers danced less than 20 days. Ricks could probably point to this to refute the claim that strippers don't require skill......if it was so easy, why don't more succeed? Why is turnover so great? Which could also go towards financial risk.....Ricks could point out that time is an asset being risked by the strippers. With the high turnover, her chances of success are low.....her time might be better used at a different job. On strippers being integral to Ricks, clearly, Ricks doesn't need strippers who can't earn $100 a night!